Employer-Employee Contracts and At-Will Employment Defined

By Mark Dacanay

Employer-employee relations are guided by the terms and conditions of the employment contract.

An employment contract is a legal agreement that is agreed upon by both the employer and the employee.

An employment contract usually contains the following:

• Name of the employer
• Name of the employee
• Job title and description
• Address of the workplace
• Details of payment
• Hours worked each week
• Holiday entitlement
• Sickness entitlement
• Grievance arrangements
• Termination of contracts notice
• Redundancy
• Disciplinary procedures
• Signatures of both the employer and the employee

In the United States, most employment contracts do not contain duration of tenure as most employees are considered to be at-will.

This means that the employer and the employee are free to terminate the employment contract anytime for any cause.

However, there are three exceptions where a firing of an at-will employee which may be the basis for a wrongful termination.

The three exceptions are:
• Breach of contract – This occurs if the employer expressly or implicitly stated a promise to an employee about a degree of job security. These statements could normally be found on employee’s handbooks or memorandums given to employees when they are hired. Courts usually interpret these as unilateral contracts where the employer promises the employee that he/she will not be terminated except for just cause.

• Breach of an implied covenant of good faith and fair dealing – This occurs when an employee contends that the employer has indicated in various ways that the employee will be given job security and will be treated fairly. Repeated promotions, pay increases, length of service, and positive performance reviews could be interpreted as signs that as long as they do their job satisfactorily then their job will be secure.

• Violations of public policy – This occurs when the termination of an employee violates or undermines existing federal and state laws. The following are examples of violations of public policy:

o Terminating an employee because he/she availed of the Family Medical Leave benefits. That right was given to the employee by the state and firing him/her over it undermines the state as well.

o Terminating an employee because he/she refuses to commit illegal act.

o Termination of an employee did not follow procedures. The company’s employee handbook usually contains the proper procedures that must be followed when an employee is terminated. If the procedure was not followed, the employee may file for wrongful termination charges.

Employment at-will still remains unclear in many states. Legislatures and court decisions continue to shape and answer the debate over how to protect employees from wrongful termination while still allowing employers the freedom to make personnel changes.

Employers now are taking measures to guard themselves against wrongful termination suits by adding express employment-at will causes to employment contracts and deleted potentially troublesome statement from their handbooks.

Employees should consult with an expert wrongful termination attorney to know if they have a winning case against their employers.